To Determine:
The counter arguments on the point of view that some believe that the rise of regional trading blocs threatens free trade progress made by the World Trade Organization (WTO).
Introduction:
The argument is baseless because in more than one ways, Regional trade has tremendously facilitated global trade and has made international trade seamless and with less barriers.
Answer to Problem 1TAI1
Solution:
It’s because of Trading blocs, nations feel encouraged towards trading options with their neighboring countries. WTO basically defines the guidelines and rules for the nations to trade amongst themselves and how the exporting and importing should function. Regional blocs also work in the favor of expanding boundaries of trading within nations. They do not threaten the guidelines of WTO at all, but in fact makes agreements which can help trade within international countries. As a result, some of these agreements or rules or arrangements also become a part of WTO.
Explanation of Solution
The success of trading blocs is evident from the rise in foreign direct Investment all across the globe which actually aids the goals set by World Trade Organization. WTO also encourages global trade and trading blocs facilitates such international trading by aiding the nations in reducing barriers. Also, WTO sees Globalization as positive force towards rising economy which is exactly what trading blocs are trying to do, promote globalization.
The argument that rise of regional trading blocs threaten free trade progress by WTO is false and has lots of flaws. Regional trading blocs are actually responsible for promoting international trade and working for global stability.
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Chapter 8 Solutions
International Business: The Challenges of Globalization (8th Edition)
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